Ahead of delivering the International Keynote Case Study at the forthcoming 3rd Retail Bulletin Loss Prevention Summit 2012 in London on September 12, Hank Siemers, group director of security worldwide at Tiffany & Co., runs through some of his thinking on shrinkage trends in the US. By Glynn Davis

GENERAL MERCHANDISE

Organised retail crime is on the way to the UK

21 August 2012 | by The Retail Bulletin

Ahead of delivering the International Keynote Case Study at the forthcoming 3rd Retail Bulletin Loss Prevention Summit 2012 in London on September 12, Hank Siemers, group director of security worldwide at Tiffany & Co., runs through some of his thinking on shrinkage trends in the US. By Glynn Davis

One thing he is clear on is that the business model of upmarket jewellery firm Tiffany & Co. helps it reduce the chance of theft within its stores, because it has limited merchandise on display and it is securely locked up. And also within the rest of its supply chain it employs the resources of security firm Brinks for delivery of product into its stores.

“We’re a luxury jeweller and our merchandise is tightly controlled so we’re very sound as an organisation in terms of internal shrinkage. Unlike other retailers our concerns are outside the company. Other retailers have more internal shrinkage whereas we look at emerging criminal trends outside the business,” he says.

Within the US the big trend that is emerging is Organised Retail Crime (ORC), which he says “everyone is talking about” including at the recent NRF loss prevention conference where most of the time was spent debating this particular topic.

He describes it as a criminal enterprise that focuses on shoplifting and does not involve violent crime. “The groups are funded and will recruit 14 to 15 people at a time who target a store and then clean it out. They can do this in minutes and it works on the basis of having a good ‘fencing’ system,” says Siemers.

Because the gangs do not use firearms or violence if they are caught then the punishment is just for a shoplifting offence so is not particularly harsh. But for retailers he says they can empty a store of merchandise in minutes – emptying entire racks of products.

Although he says Tiffany & Co. is not exposed to these sorts of crimes - “we’re relatively well insulated” - it does represent a serious threat to the retail industry because “once a crime works then they all follow” the particular technique used.

However, he acknowledges that his firm is susceptible to some “distraction crimes”, which is the technique ORC relies upon. “Groups of individuals are targeting luxury brands across the world. They are causing a distraction by confusing the sales professionals in the stores. They’ll distract them so much that they’ll walk out [with the jewellery] without the member of staff even knowing about it for some days. It’s gut-wrenching,” he says.

With these sorts of activities spiking at periods and then going away for some time Siemers says it is essential that when new sales people join a company they are given the relevant training because they will not be used to these sorts of distraction techniques and they have to be very diligent.

Another area where Tiffany & Co. has to show great care is with the shows that it runs around the world to present its jewellery to prospective customers. He cites a recent “huge” event at the Forbidden City in Beijing where a strict security programme had to be developed. These require elaborate planning and can, he admits “be quite cumbersome” but they are clearly a necessity.

Although Siemers says ORC has not yet reached the shores of the UK he suggests that its appearance is inevitable and that retailers must be aware of this potential threat to their businesses.

Do not miss this vital Summit,sponsored by General Dynamics - click here for programme and registration details.

Digitally native competitors and demanding customers are forcing a new perspective in retail. AI and machine learning can help you step up to the challenges; and some ‘small and beautiful’ solutions can increase your conversion rates within just a few weeks.